As we explored previously, the Brazilian government recently introduced a new web recovery service for required NFe goods and CTe transportation documentation, allowing companies to pull their XML invoicing records back 5 years. The implication is that the government intends to increase its auditing efforts and will severely fine companies that do not adhere to the 5-year invoice archiving mandate. While these fines can be tremendous for unprepared companies, this recovery service also has benefits, such as helping companies to streamline processes and eliminate obsolete e-invoicing solutions.

All shipments in Brazil must be accompanied by the PDF representation of a valid XML invoice – known as a DANFe. In fact, a new project underway in the country is taking this mandate to a new level, tracking goods via RFID based on the NFe documentation of the shipment. While this standardization and automation increases the risk of outbound shipping delays, the same automation helps procurement and A/P specialists ensure they are getting exactly what they expect – and that the goods on the truck match the invoice – eliminating manual processes to verify shipments and invoices. Now with a simple scan of the PDF invoice, companies can ensure the validity of their inbound shipments before the truck is unloaded, and matching to a purchase order can happen before it even arrives – reducing the costs associated with receiving goods by up to 40%.

While some companies may see this compliance and archiving process as a hassle, it can actually improve business processes. The compliance mandates ensure that accounts payable are always processed from a legal, verified XML invoice that is matched to your tax ID. This process eliminates errors, ensures proper tax payments and reduces manual procurement and A/P processes. Companies can use these XML invoices to simplify the inbound receiving process, turning hours of manual data entry into a single scan and click process.

This new recovery service also eliminates the need for traditional invoicing networks in Latin America. European models that charge transaction fees or a percent of an invoice’s value for transmission are now irrelevant in Brazil – the government is providing this service for free.

Instead, companies should look for an end-to-end compliance solution that simplifies and lowers the cost of sending e-invoices, collecting validated e-invoices and driving the government approval codes into your fiscal tax reports. As a best practice, ensure you use the recovery XML service as an integrated part of your receiving processes. Once a scan of the PDF (DANFe) happens at the unloading dock, the ERP system should automatically check to see if there is a valid, matching XML in the system. If the XML doesn’t exist, the system should immediately call the government server and download the XML. These validated XMLs should then be automatically driven into your SPED tax reporting to eliminate the potential for errors.

As the rest of Latin America looks to Brazil as it updates its compliance measures, expect more drastic changes to be coming throughout the region, and ensure that your company or compliance partner is ready to meet these new demands.

First Voice

Daniel:
22.05.2015 at 4:42 pm

It’s not often you look to the Brazilian government as a leader in automation, innovation or compliance, but this sounds terrific.